Cyclical sectors like gold companies (XGD below) and many commodities are now in cyclical bear market territory (down more than 20% from their highs), but the interest sensitives (like financials, REITS and utilities) still have considerable downside potential in this cycle. Unfortunately for guaranteed deposit-refugees who have run to “defensive” stocks looking for yield, bear market selling cycles generally spread across the sectors before they complete. With the 2009 cycle lows a potential test, the next few months could offer great opportunity. But only for those who can first avoid significant capital losses.

Chart source: Cory Venable, CMT, Venable Park Investment Counsel Inc.

And in case anyone is wondering what a full market cycle within a secular bear looks like (or why I always say timing the market cycle well is everything to do with success or failure), this chart of the Canadian Venture Exchange offers a reminder: a four year round trip from the low in 2009 to the same price level in 2013.

Chart source: Cory Venable, CMT, Venable Park Investment Counsel Inc.